If your church or nonprofit is thinking about a building project, you’re probably feeling both excited and overwhelmed. It’s a big step — one that has the potential to expand your impact but also carries serious financial and operational weight.

Before you break ground, or even break the news, it’s worth slowing down to ask a few key questions that will help you move forward wisely and confidently.

1. Start With Your Financial Foundation

The first thing I always ask is simple: What do your reserves look like?

A healthy organization should maintain an emergency fund covering at least three to six months of operating expenses. But when you’re considering a major project, I recommend being on the high end of that range — closer to six months.

A solid reserve isn’t just a financial cushion; it’s a signal of stability and stewardship. It tells lenders, donors, and your board that your organization can sustain itself through the demands of construction, fundraising, or unforeseen costs.

2. Do Your Due Diligence

It’s easy to fall in love with an idea for a new building — especially when space feels tight or growth seems to demand it. But before you commit, take time for a feasibility assessment.

Ask:

• What new opportunities would this project truly create?
• What will the ongoing costs be — utilities, maintenance, staffing, insurance?
• Will it expand your capacity enough to justify those costs?

I recently worked with a nonprofit that rented an event center and was considering building their own facility. After we analyzed the costs and projected revenue, it became clear there was no financial advantage to building. They were better off staying where they were.

The same principle applies to churches. Sometimes, instead of constructing a new sanctuary, the more sustainable next step might be adding another service or better utilizing existing space.

A feasibility study helps you make these decisions with clarity instead of emotion.

3. Evaluate Funding Options and Timing

Next, look at your overall financial position and ask:

• Do we have borrowing capacity?
• Could we realistically raise the funds through a campaign?
• What’s the timeline for both fundraising and financing?

Laying out these details early helps you understand what’s feasible — and in what sequence things should happen. It’s far better to slow down now than to move forward prematurely and find yourself in a high-risk financial position later.

4. Keep the Early Stage Private

One of the most common missteps I see is organizations going public too soon with a building announcement.

When excitement runs high, it’s tempting to share the vision quickly. But if you announce before your due diligence is complete — before your funding and financing are secured — you can easily feel obligated to move forward even when the numbers don’t add up.

I’ve seen churches back themselves into high-risk debt simply because they didn’t want to appear to be backing out of a public commitment.

Your discernment phase should stay private until the project is truly viable.

5. Assess Your Long-Term Readiness

Finally, look at your organization’s financial health ratios.

With our Fractional CFO clients, we use a set of nonprofit financial ratios to help objectively gauge the financial health of any church or nonprofit — no matter how big or small they may be.

These ratios serve as a diagnostic tool, helping boards and leaders evaluate not just whether a project is possible, but whether it’s wise.

For more on these ratios, you can check out our Nonprofit Ratios Playlist which breaks down each ratio and how it applies to your organization’s financial stability.

If your financial indicators aren’t where they should be yet, that doesn’t mean “no.” It simply means “not yet.”

Moving Forward With Confidence

Building projects can be catalysts for growth — but they can also become burdens if started too soon. The goal isn’t just to build something new; it’s to build something sustainable.

Take time to do your due diligence, strengthen your reserves, and seek wise counsel before making any commitments.

And if you’re not sure where to start, we’d love to help. Our Fractional CFO Services are designed to guide churches and nonprofits through these key financial decisions with confidence.

You can download 5 Steps for Nonprofit Leaders to Thrive to get a head start on building a healthy financial foundation, or start the conversation at terisaclark.com/you to talk through your organization’s next big decision.

I look forward to serving you.